Apply for an Allowable Rate of Production for Oil Wells

The Allowable Rate of Production (ARP) is the allowable volume of oil that can be produced from a well completion. This rate is assigned via a minimum allowable, a maximum permissible rated-off-target penalty (MPR - OTW Penalty), a maximum permissible rate (MPR), the Economic Allowance (EA), or good production practice (GPP). Except for a well completion subject to or producing below the Minimum Allowable or assigned GPP an ARP is subject to a gas-to-oil ratio (GOR) penalty.

The Integrated Resource Information System (IRIS) assigns an ARP to a well at the time of license based on its location and proposed completion as described in Directive PNG012: Allowable Rate of Production: Oil Wells.

An operator can make an application for a different ARP other than the one assigned by IRIS:

• A well under EA can make an application for an MPR or GPP.
• A well under MPR can make an application for GPP.
• A non-horizontal well completion that is subject to an off-target penalty can make an application for a MPR – OTW penalty.

• Have an Integrated Resource Information System (IRIS) account and the appropriate permissions assigned by your IRIS Security Administrator.
• Own the well or have agreements in place that allows them to submit an application for the well.

The following steps must be completed for each individual well the operator is requesting an MPR or GPP allowable rate of production:

1. Review drainage unit, setbacks, and target area by referring to Instructions for Determining Oil and Gas Well Spacing Using the GeoAtlas.
2. Review the drainage area and the initial ARP assigned with the well licence, including applicable penalties.
3. Complete the MPR Application (Oil) Form for horizontal or non-horizontal wells, or the GPP Application Checklist Form.
4. An operator may submit a request to have an overproduction exemption applied to a completion as part of the MPR or GPP application. The request must be supported by a discussion on how the accumulated overproduction will be mitigated.
5. Only one application is required if GPP is being requested for a specific area, pool unit or project.
6. Confirm that all the information is complete and accurate, and that all the forms are signed and in the proper format.
7. Log in to IRIS and complete the appropriate application process for authorization and attach the required documents.

Overproduction mitigation plans and request to exempt overproduction not related to an application for GPP or MPR must be submitted in IRIS as an attachment through the Overproduction Mitigation Plan Application. The application should provide the plan the operator will follow to address the overproduction. This may include shutting in the well for a period of time or committing to underproduction for a period of time or up to a certain amount.

Therefore, the application should be used if:

• Licensee has an alternative proposal to address overproduction on a well.
• Licensee cannot immediately bring the well to produce below the allowable.

This application is not to be used for GPP and MPR applications as they have separate application forms and processes.

As this application is asking for an exemption that is not defined, supporting details should show how the planned mitigation will impact recovery for that well and in the area especially in the offset drainage area. These details should include analogue data from offset wells, pressure data showing current reservoir pressure in the area, production profiles of the subject well and offset wells including production analysis and summary, mineral ownership/operators in the offset drainage area, and any other information in support of the plan.

IRIS Login

1. Monitoring and Notification of Overproduction
   

   IRIS displays well completion overproduction and ARP assignment at the completion level on the Production/Injection Tab and ARP Tab respectively. Annual values for over/underproduction are displayed on this tab, underproduction does not accumulate if there is no overproduction to assign it against. Notifications are provided monthly via IRIS when a completion produces over the assigned ARP by:

   • 100% within a single production month
   • Any amount for a completion subject to an off-target penalty within a single production month
   • 25% within a single production month

   An operator is responsible for monitoring their production and correcting any overproduction.

   Incurred overproduction may be exempted subject to overproduction mitigation plan approval.

   Outside of the system generated notifications, sustained overproduction at a lower rate or other issues may prompt intervention by ministry staff to address production practices as per Directive PNG012.

2. Reports
   

   Infrastructure Wellbore Completion ARP – this report allows a user to see all assigned ARP on oil well completions associated to their BAID. The ARP displayed is the daily allowable rate assigned to the completion listed.

   Allowable Rate of Production – Cumulative Overproduction Report – Can be filtered when it is run to specific pool, project, unit or cumulative overproduction percentage for a specific production month. This report will also show the cumulative overproduction amount and all time percentage value as well as the number of notifications that have been issued on the completion related to having overproduction 25% more than the assigned allowable. *The "Currently Active OP>25%" on this report shows the value as of the date the report is run not for the month specified by the user. All other values and fields are specific to the month identified by the user when generating the report.*

3. Historical Reports
   

   The Oil Allowable Rate of Production (ARP) Report – Overproduction

   Prior to August 2018, Overproduction Management reports were posted the Publications Centre.



4. Applications/Forms
   
   
   • Maximum Permissible Rate (MPR) Application - Horizontal Well
   • Maximum Permissible Rate (MPR) Application - Non-Horizontal Well
   • Good Production Practice (GPP) Application
   • Concurrent Production of Oil and Gas Application
   • Overproduction Mitigation

   Refer to the Directives and Guidelines below for details.

   • Directive PNG012
   • Guideline PNG021
   • Directive PNG007
   • Directive PNG009